I have just seen an advertisement on television for Secure Homes offering to take all your money worries away from you and pay your bills for you. They don’t mention of course that you will have to pay them for the privilege! It started me thinking about home finances and I thought I’d write an opinion about how I manage my household accounts. I know this all seems logical to me because of my training as an accountant and my love of playing with numbers, but there might be something here that’s useful to someone. Beginning with the Secure Homes type of account, I have an account with the Abbey National Building Society where I keep the money for the household bills. I began by working out the annual cost of each of the following bills – electricity, gas, water rates, telephone, car tax and TV licence – and then I added the whole lot together and divided by twelve to give a monthly payment. I added a small amount to this to act as a buffer in case of emergencies and I pay the same amount into the account every month and pay the bills with the money in the account. This means that, even if all the bills come together, the money is still there to pay them. I also keep my holiday money in this account. Any money earned from car boot sales, competitions, the lottery, money back offers etc gets paid into the holiday fund and last year it paid for a fortnight touring Scotland! I have also set up standing orders on this account for some of the bills in order to benefit from discounts offered. I keep a spreadsheet on my PC showing what amounts have been paid in, for what purpose and what bills have been paid out of this account. I opened an ISA account whilst I was still employed so that I could take advantage of tax-free savings. Although this doesn’t apply to me now I don’t pay tax anymore I still keep the account. I opened it with my own bank, First Direct, paying the minimum amount the
y allowed per month of £25. I don’t notice the amount leaving my current account but it soon begins to mount up in the ISA. We used it to buy our first (old) car a few years ago and I am in the process of letting the balance build up again now. I also have a cash ISA where I pay in our loose change. This may sound a little crazy but bear with me. When we return from shopping we always put 1p’s, 2p’s, 5p’s and 20p’s in the piggy bank on the windowsill. I then bag the coins up when we have enough and pay them into the cash ISA. I used to use a Tessa account for this purpose and both times I got a cheque for about £1,000 at the end of the five-year period – not bad for loose change eh? I have a few insurance policies that range from £10 to £20 per month and they are set to mature at roughly yearly intervals. I will get between £2,000 and £3,000 per policy from these. I took these out while I was still at work so the payment of them wasn’t really noticed, but even now I have left work I think it’s still a worthwhile investment. I have opened an account with Sainsburys Bank and keep a spreadsheet on my PC showing what payments have been made there. I do a paper round every Friday delivering our local free sheet and I get paid between £6 and £13 per week depending on how many leaflets I have to also deliver. I have this paid straight into this account, because, if the money was just paid into my ordinary account each week, I wouldn’t really notice the benefit. Paying it directly into this account means that it will mount up and I can buy something useful with it. I also pay in all my money earned from the Internet for the same reason. This also means that there is an ever-growing amount that could be used in an emergency if necessary. Of course it all earns a decent rate of interest too. I also try and plan ahead for events such as birthdays and more especially Christmas. I
f I win a prize that I think would be appreciated by someone, I keep it ready to go with his or her next present. OK so this makes me sound a bit of a cheapskate, but in our family we tend to try and outdo one another with freebies, 2 for 1 offers etc. I assure you that I do actually buy presents as well – honestly! Another tip that I have found useful, especially recently now I don’t have a regular income, is not to carry more cash around than you actually need. It’s so much easier to spend it if you’ve got it in your purse or your wallet. As I said at the start I enjoy playing around with numbers so the administration of these accounts is part of the enjoyment for me, but I also know that if we needed cash either in an emergency or when we finally come to move house I have some reserves to call on. It doesn’t amount to a fortune by any means but it does mean that I am putting my money to the best use that I can.
Giro bill payment - Although not a new concept this new service from Girobank has a lot of promise. The site opens with a nice simple splash page that performs the usual function of allowing you to log on or to register. If you are new to the site the register button will take you straight to the terms and conditions of the service. This is a good feature in my view as it ensures user exposure to the legalities and boundaries of the system. Assuming that you accept these terms and conditions you then input your user details and build a portfolio of the bills that you wish to pay using this service. It is at this point that I would have to criticise the content managers as to build this portfolio you must have all your customer numbers to hand. The reason I would criticise them is simply it is not made apparent that these are required before you can complete your service registration. If like myself you wanted to signup to the service and then choose what bills to pay it is rather frustrating not to be aware of this requirement. The drop down menus content (used for company selection) range from the sublime to the ridiculous. In some menus there is only one selection possible, in others there are anything up to fifteen. All in all this has the potential to be an excellent service but I definitely would say it needs tweaking. This service is available from www.billpayment.co.uk.
There are now agencies that will pay your bills for you! How excellent! Or not as the case may be. A good friend of mine was financially in the deep brown poopy like stuff, so she consulted one of these agencies to help her out. She was paying them £150 a month for three months, the idea being that they would use the £150 to pay all her bills and come to agreements with them over reducing the amount to pay. So, 3 x 150 = £450. And out of that, they have so far paid one bill of £10. She's still getting letters demanding money from all the people she owes to, despite the agency telling her that they would deal with all the correspondance. She has now told them she wants all her money back as she will pay the bills herself - because at least then they'll get paid! The agency have told her that she won;t get all her money back because of the administration costs, and that it'd be better to keep paying them. All this when she had a letter from them advising she could cancel the arrangement at any time with one phonecall. So the moral of this tale is - why pay someone to pay your bills when you can make a better job of it yourself. She has successfully negotiated lower payments with all her creditors (the agency didn't do it for her) and she's told them to take a running jump.